DBS

DBS: DMG see DBS gaining on its home loan market share from its new HDB loan initiative- a floating rate home loan for HDB flat buyers which caps interest at 2.5% for the first 10 years- 0.1% below HDB's 2.6% concessionary rate. House believe this will attract buyers who are concerned with future rises in interest rates. DBS's home mortgages market share at 21.3%; OCBC at 26.3% and UOB at 29.6%. The rise in SG govt bond yield is a positive for NIM in subsequent quarters, and that street is currently factoring a soft 1Q13 SIBOR. DMG upgrades DBS to BUY with a TP of $17.20, pegged to 1.25x FY13 book- lower than the historical average of 1.31x.